In a surprise post on the company’s website, Redfin CEO Glen Kelman today confirmed that 6% of the workforce—around 470 people—will be made redundant across all its businesses.
Kelman wrote that he is “sorry that we can’t keep our commitment to you”, in a post that also referenced struggling share prices, a housing market downturn, and profitability issues.
The company’s share price has dropped from $97 to just $8 since February 2021.
Redfin is a real estate brokerage firm that essentially acts as a portal across the whole of North America.
“A layoff is always an awful shock, especially when I’ve said that we’d go through heck to avoid one,” he wrote. “But mortgage rates increased faster than at any point in history. We could be facing years, not months, of fewer home sales, and Redfin still plans to thrive. If falling from $97 per share to $8 doesn’t put a company through heck, I don’t know what does.”
In his message to staff, Kelman also wrote May demand was down 17%, saying “we don’t have enough work for our agents and support staff.”
Meanwhile, real estate tech company Compass announced a similar level of layoffs, with 10% of its staff being let go in a “Strategic Action” that takes “meaningful actions to improve the alignment between the Company’s organizational (sic) structure and its long-term business strategy.”
Compass CEO Robert Reffikin said in the company’s Q1 earnings call, that his goal was to “manage the business to ensure we will not require additional capital.”
Redfin and Compass have struggled in 2022, with both companies pushing for profitability in a difficult housing market; Redfin itself has reported that in April 2022, home prices were up 15.3% compared to 2021 while housing transactions were down 11.7%.